When you’re living with a disability, everyday life sometimes requires adaptations and special planning. Something else we should all plan for is the care we will need in the future. Even if you are currently self-sufficient, there may come a day where your needs exceed what you can do on your own. Long-term care can be very expensive, so there’s no time like the present to make a plan that ensures those costs are within reach.
Health insurance is one of the most basic financial needs you should account for — both now and for the future. This is because having the right level of coverage, that is also affordable, is essential for getting the care you need without a major hit to your household budget. And while most health insurance doesn’t cover long-term care, someone with a disability may be able to get certain benefits at a younger age.
For individuals with disabilities, there are some situations where you can qualify for Medicare before the age of 65. To find out what your options are and access information about signing up for plans, check out this guide to get started. Another great tool you will find is that this guide helps you look up Medicare Advantage plans where you live. While traditional Medicare doesn’t cover long-term care, some new Medicare Advantage plans include this benefit.
While the big expenses like healthcare are probably what you think of first when it comes to financial planning, budgeting for everyday expenses also plays a huge role in your bottom line (and in what you can set aside for care). The Council for Disability Awareness recommends creating what they call a disability security plan, which starts with basic budgeting like evaluating your income in relation to your expenses. Afterward, you can adjust expenses to save money while finding additional sources of income where you can. Even if you can’t save to cover long-term care expenses entirely out-of-pocket, creating a solid budget will help make sure you’re saving as much money as possible.
Special Needs Savings
When it comes to saving, most people are better off using savings toolsthat are designed specifically for those with special needs. One option is to create a special needs trust. According to CNBC, you may want to set up a first-party special needs trustfor yourself if you receive assets that you want to save after qualifying for Medicaid or Social Security Income (SSI). You can also have a family member set up a third-party special needs trust for you. The primary benefit of a special needs trust is that the money isn’t counted when you apply for SSI benefits, which requires that you have no more than $2,000 in your bank account at any given time.
Another option for younger people is to set up an ABLE account. ABLE is named for the Achieving Better Life Experience Act, and individuals who become disabled before turning 26 can use these accounts to save up to $15,000 per year tax-free. Like special needs trusts, ABLE accounts don’t affect your eligibility for Medicaid or SSI.
Paying for Long-Term Care
Long-term care for someone who is disabled typically means getting round-the-clock assistance, whether through a home health aide or moving to assisted living or a nursing home. Even though you may get coverage for long-term care through Medicaid or certain Medicare Advantage plans, you should also look into other ways to cover the costs of long-term care. Long-term care insurance isn’t always an option for someone who already has a disability, but you may be able to use a life insurance policy or open a health savings account.
Planning for your financial future takes more than just one strategy. It’s a multi-pronged approach that includes savings and accessing the right financial tools and benefits. This planning strategy is the ticket to ensuring you aren’t left worrying about whether you can afford to get quality care when you need it most.
By Mary Wilson